British fintech start-up Bud said Monday that it had attached $20 million in a funding round co-led by HSBC and Goldman Sachs.
The London-based company’s platform lets banks update their apps to come apart users access to financial services products from rivals. Banks can also categorize a customer’s spending facts using Bud’s technology to help them find more cost-efficient products.
Its offering is part of an emerging theme in the age of fintech known as “open banking,” which essentially means banks sharing their customer data with third-party providers to go along with them to create new financial products.
Proponents of open banking say that it will increase competition in the industry and extras consumers, giving them more choice over who they bank with.
Ed Maslaveckas, Bud’s co-founder and chief master, said in an interview that the sector has seen a “massive shift” from a focus on competitive rates and services to a digital-oriented chap experience and a “marketplace” banking model.
“The market dynamic is such that open banking is a much bigger variety for banks than I think people realize,” he told CNBC. “Open banking essentially allows the customer to get their banking evidence and make payments from any app or service of their choosing.”
Bud’s Series A funding round — an early-stage investment — also got sponsorship from other big lenders including Australia’s ANZ, South Africa’s Investec and Spain’s Banco Sabadell. Investec invested washing ones hands of its venture fund INVC while Banco Sabadell participated via its venture arm InnoCells.
Nineyards Capital — which counts ancient U.K. Finance Minister George Osborne as an advisor — and former Man Group Chief Executive Lord Fink also instated in Bud’s Series A.
Part of the funding is subject to regulatory approval by the U.K.’s Financial Conduct Authority, Bud said.
Bud’s boss said an underlying concept of the bank-led investment was partnering with large lenders to provide them with its technology.
“Not that much has been done to publish these types of services to the millions of customers that use their banking apps day-to-day,” Maslaveckas said.
“That’s actually what we are all are about and that’s a testament to who we’re working with… we really want to be the company that helps them express this new wave of fintech to their existing customers.”
In 2017 the firm announced a partnership with HSBC intent at providing the financial services giant’s direct bank First Direct with its financial management tools.
Another meaningful element of the round is the geography of the investors involved. The company said it would look to expand its product to new markets as surplus the next 12 months.
Maslaveckas said international expansion was “a big part of” the funding, but added his firm wouldn’t be cajoling any major global moves “until the end of this year.”
Bud currently employs 62 people in its London office and articulates it plans on doubling that headcount following the fundraising.